Dude, Where’s My $50 Trillion?

8122008

If you own a house, or stocks, bonds or mutual funds, even gold, you’ve probably noticed that the value of your assets has probably declined quite a bit in the last year.

Duh.

It’s estimated that, since the beginning of the global financial crisis, close to $50 trillion of wealth has evaporated. The losses have occurred mostly in stocks and bonds both domestically and internationally and in real estate values in the US.

In the stock and bond markets globally, losses exceed $33 trillion. That’s not surprising when you see the declines in the world’s stock markets since their peaks:

Dow Jones

-36.8%

S&P 500

-42.4%

NASDAQ

-45.5%

FTSE 100 (UK)

-53.8%

CAC 40 (France)

-53.4%

Xetra DAX (Germany)

-53.0%

NIKKEI 225 (Japan)

-37.0%

HANG SENG (China)

-49.9%

Americans have also seen over $5.5 trillion in home value disappear. The UK is also experiencing steep declines, as are most developed countries across the globe. Even as commodity prices have come down, which may be good or bad depending on how you look at it, the result is trouble for oil-producing countries that depended on that wealth.

It’s not surprising then, to see that economic activity has slowed so much in the past few months. The ‘wealth effect’ is diminishing quickly. People just don’t feel as rich as they used to, and this has implications for consumers and business for a long time to come.

3 responses

@Warrior – Will do. However, if it does get that bad, we’ll be looking for bailout/infusion funds from: the Martians, Venusians, Pleadians as well as any and all sundry, other-worldly beings. There’s just not that much wealth to go around on this TerraFirma. . !